Kojamo plc: Kojamo plc's Interim Report 1 January-31 March 2017
KOJAMO PLC
Stock exchange release
Interim Report
9 May 2017 at 12.30
Kojamo plc's Interim Report 1 January-31 March 2017
Summary of January-March 2017
- Gross investments during the period totalled EUR 65.0 (43.7) million. Gross investments were 77.8 (45.6) per cent of turnover.
- The fair value of investment properties was EUR 4.3 (3.7) billion. Return on investment was 7.0 (7.6) per cent.
- Turnover totalled EUR 83.6 (95.9) million. Turnover is entirely generated by rental income. Turnover decreased due to the divestment of 9,011 apartments during 2016.
- Profit before taxes amounted to EUR 58.3 (54.3) million. The profit includes EUR 23.5 (14.1) million in net valuation gain on the fair value assessment of investment properties and EUR 0.7 (1.0) million in capital gains and losses on investment properties. The profit increase resulted primarily from larger changes in the fair value and lower financial costs than in the comparison period.
- Net rental income was EUR 52.6 (60.8) million, representing 62.9 (63.4) per cent of turnover. Net rental income decreased due to the divestments of rental housing stock in 2016.
- The financial occupancy rate remained high, standing at 96.8 (96.9) per cent during the review period.
- There were 1,747 (1,046) Lumo apartments under construction at the end of the review period.
- Kojamo owned 33,843 (37,293) rental apartments on 31 March 2017.
Unless otherwise stated, the comparison figures in brackets refer to the corresponding period of the previous year. The figures in this Interim Report have not been audited.
CEO Jani Nieminen: The renewed company adopted a new name
Our new name is Kojamo plc. Stemming from the considerable renewal that has taken place in the company, the name change became valid on 27 March 2017. By changing its name, the company is clarifying its operations and enhancing its competitive strength. It is easier for customers and stakeholders to understand the Group's offering of commercial Lumo homes and non-commercial VVO homes.
Rental housing is associated with a large number of outdated mental images, and it takes courage to change this. A good example is the Lumo online store that has given the customer the power in choosing a rental apartment. We have included all Lumo rental apartments in the online store, and demand has been strong. A total of 1,500 tenancy agreements have already been signed in the Lumo online store.
We invest in ensuring that tenants have good experiences of living in our properties and develop services that make the residents' everyday lives easier. Residents of Lumo homes in Rastila, Helsinki, became the first to be offered the use of a shared van. The service is targeted especially at those who occasionally need the use of a van. Lumo also brought back caretakers to each property: a completely new kind of team of caretakers takes on responsibility for the property maintenance of Lumo buildings in the Helsinki Metropolitan Area, which makes the service run even smoother.
During the review period, we have been active in launching construction projects, focusing on the Helsinki Metropolitan Area. We are building Lumo apartments near the Urheilupuisto metro station in Espoo and in Katajanokka, Helsinki, among other locations. In addition, we are converting old office premises into apartments at Töölönkatu 11 and Eerikinkatu 7 in Helsinki.
In approximately five years' time, the company has invested nearly EUR 1.5 billion in market-based rental housing. We forecast that investments in new development and housing stock acquisitions will exceed EUR 300 million in 2017. At the end of the review period, there were 1,747 new rental apartments under construction, of which 1,473 were in the Helsinki region.
Key indicators
| 1-3/2017 | 1-3/2016 | 2016 | ||
| Revenue, M € | 83.6 | 95.9 | 351.5 | |
| Net rental income, M€ | 52.6 | 60.8 | 222.0 | |
| % revenue | 62.9 | 63.4 | 63.2 | |
| Profit before taxes, M € | 58.3 | 54.3 | 289.7 | |
| Operative result, M € | 26.6 | 34.0 | 116.9 | |
| Investment properties, M € 1) | 4,318.3 | 3,705.3 | 4,298.9 | |
| Financial occupancy rate, % | 96.8 | 96.9 | 97.4 | |
| Interest-bearing liabilities, M € 2) | 2,087.6 | 1,506.7 | 2,122.8 | |
| Return on equity, % (ROE) | 10.1 | 10.2 | 12.9 | |
| Return on investments, % (ROI) | 7.0 | 7.6 | 8.8 | |
| Equity ratio, % | 40.6 | 43.5 | 40.7 | |
| Loan to Value, % 2) 3) | 45.2 | 38.5 | 46.7 | |
| Earnings per share, € | 6.33 | 5.95 | 31.38 | |
| Equity per share, € | 251.71 | 233.61 | 251.20 | |
| Gross investments, M€ | 65.0 | 43.7 | 696.0 | |
| Number of personnel, end of period | 296 | 293 | 286 | |
| 1) Including items held for sale | ||||
| 2) Does not include items held for sale | ||||
| 3) The calculation formula is changed 2016 and the comperative figures adjusted to corresbond to the current calculation method | ||||
Outlook for Kojamo
Kojamo estimates that in 2017, net rental income will be EUR 208-220 million. Investments in new development and housing stock acquisitions are forecast to exceed EUR 300 million. Kojamo estimates that in 2017, its operative result will be EUR 96-107 million. The outlook takes into account the effects of both the significant housing divestments carried out in 2016 and the housing divestments and acquisitions planned for 2017, the estimated occupancy rate and the number of apartments under construction.
Annual General Meeting
At the Annual General Meeting of VVO Group plc held on 27 March 2017, Riku Aalto, Matti Harjuniemi, Olli Luukkainen, Jorma Malinen, Mikko Mursula, Reima Rytsölä, Jan-Erik Saarinen and Ann Selin were re-elected as members of the Board of Directors for the term that ends with the Annual General Meeting of 2018. Riku Aalto was elected Chairman of the Board of Directors.
Jarkko Eloranta, Ville-Veikko Laukkanen, Pasi Pesonen and Esko Torsti were elected as members of the Nomination Board.
It was decided that the following annual fees will be paid to the members of the Board of Directors elected at the Annual General Meeting: EUR 26,000 for the Chairman of the Board of Directors, EUR 15,000 for the Deputy Chairman and EUR 9,000 for each of the members. In addition, it was decided that the attendance allowance for Board meetings will be EUR 600 per meeting.
KPMG Oy Ab, with Esa Kailiala, APA, as its principal auditor, was elected the auditor for the company for the term lasting until the next Annual General Meeting.
The Annual General Meeting decided in accordance with the proposal of the Board of Directors that the company will pay a dividend of EUR 6.80 for every Series A share, for a total of EUR 50,337,408.00, and EUR 102,249,594.95 will be carried over in unrestricted shareholders' equity for the financial year 2016.
The Annual General Meeting authorised the Board of Directors to decide on one or more share issues and the issuance of special rights entitling to shares, as referred to in Chapter 10, Section 1 of the Limited Liability Companies Act. Share issues and the issuance of special rights entitling to shares can be used to issue a maximum of 1,480,512 new Series A shares in the company, or transfer a maximum of 600,978 Series A shares currently held by the company. The authorisation is valid until the following Annual General Meeting.
The Annual General Meeting decided to change the company's business name to Kojamo Oyj in Finnish, Kojamo Abp in Swedish and Kojamo plc in English.
At its Organising Meeting after the Annual General Meeting, the Board of Directors elected Mikko Mursula Vice Chairman of the Board of Directors.
The following persons were elected to the Audit Committee: Mikko Mursula as Chair and Matti Harjuniemi, Jorma Malinen and Jan-Erik Saarinen as members.
The following persons were elected to the Remuneration Committee: Riku Aalto as the Chair and Olli Luukkainen, Reima Rytsölä and Ann Selin as members.
Further information:
Jani Nieminen, CEO, tel. +358 20 508 3201
Erik Hjelt, CFO, tel. +358 20 508 3225
Kojamo plc focuses on real estate investments in Finland, renewing rental housing in order to make it increasingly attractive. The company develops Lumo homes and services that promote work-related mobility in the urbanising Finland, increase well-being and protect the environment. Over the past five years, the Group has invested nearly EUR 1.5 billion in commercial rental housing.